Financial markets are platforms or systems that facilitate the buying and selling of financial assets such as stocks, bonds, currencies, and derivatives. They play a crucial role in the economy by enabling price discovery, liquidity, and risk management. These markets can be categorized into various types, including capital markets (where long-term securities are traded), money markets (for short-term debt instruments), and foreign exchange markets (for currency trading). Financial markets are essential for businesses to raise capital, for investors to earn returns, and for governments to implement fiscal policies, thereby contributing to overall economic stability and growth.